VCU board discusses increased spending in FY26 budget, selects new rector

VCU anticipates at least $50 million in new spending will be incorporated into its FY26 budget. (BizSense file)

The VCU Board of Visitors recently discussed the university’s upcoming budget and tapped two members with backgrounds in the banking sector to lead the group.

The university anticipates more than $50 million in new spending will need to be fit into its in-the-works fiscal year 2026 budget, VCU CFO Meredith Weiss told board members on Friday.

About half of that is $24.6 million in tuition waivers for students who get benefits through the Virginia Military Survivors and Dependents Education Program. Other new expenses include VCU’s contribution – $16 million – for state-mandated faculty and staff salary increases. VCU also anticipates a $9.7 million, inflation-related increase for things like faculty promotions and maintenance contracts.

In addition to the millions of dollars that VCU expects it’ll be required to cover, the university wants to spend $17.3 million in measures intended to strengthen its academics.

Those expenses would include an $8.7 million interdisciplinary innovation program for faculty to prototype degrees and certificates. Further new investments on the scale of $8.6 million include funds to launch and develop academic programs, implement a student retention program and expand internship opportunities.

With those costs looming, and some fund reallocations already planned, VCU is currently anticipating a budget shortfall of $16.2 million, and Weiss said the university was weighing a variety of strategies to close the gap.

“We’re looking at additional cuts, realignments and efficiencies,” she said.

University staff are expected to bring a possible game plan for filling that hole to the board in the coming weeks. The board is anticipated to have an FY26 budget before them for final approval in May or June.

A tuition increase could potentially be part of the solution. Weiss said that a 1% increase would generate $4.5 million in new funds, and that a 3.6% tuition increase would cover the entire anticipated budget shortfall.

VCU President Michael Rao told the board his objective was to avoid a tuition hike, and said that increases to tuition created a barrier to whether people enroll at VCU.

“We’re at a point where we really have to start thinking about this in terms of what it does to access and it includes out-of-state access too. So my goal is to see if we can find a way to zero depending on what the government support is,” Rao said.

VCU charges the typical, in-state undergrad enrolled in 15 credits per semester $16,720 in tuition and fees for the current 2024-2025 academic year. That rate was set last spring, and was a 2.7% increase to the tuition rate over the 2023-2024 academic year.

While enrollment for the upcoming fall semester looks promising, Weiss said it was too early to tell what kind of growth the student body might see.

“Early indications seem that enrollment is increasing,” she said. “We won’t know where it lands until the fall, but that seems to be going well.”

VCU’s budget for the current FY25 cycle is $1.7 billion. A 1% cut to the university’s operating budget would free up $6.4 million.

What VCU’s FY26 spending plan will look like is still being determined, and will depend on the state’s budget, which was still in the works and not yet finalized as of the board’s budget briefing on Friday.

The university is planning for at least $16.1 million in state funding support, including $8.1 million for the military-family waivers program and $8 million for the state-mandated, 3% salary hikes. It anticipates a one-time infusion of $10.8 million from the state for operating support in FY26.

Also at last week’s meeting, the board approved appointments to the body’s leadership posts.

Ellen Fitzsimmons was elected to serve as rector of the board. As rector, she will lead the 16-member body that governs the university and sets its annual budget.

Fitzsimmons is former chief legal officer and head of public affairs at Truist Financial Corp. She was appointed to the VCU board by Gov. Glenn Youngkin in 2022.

Steven DeLuca was tapped to serve as the board’s vice rector. The Capital One vice president and head of state and local government affairs was appointed to the board by Youngkin in 2023.

Fitzsimmons and DeLuca will assume their leadership roles on the board July 1 and serve two-year terms.

Currently, the board’s rector is Todd Haymore, who is chief of Hunton Andrews Kurth’s global economic development, government relations and commerce group. The board’s vice rector is Andy Florance, CEO and founder of real estate data firm CoStar Group.

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